More councils consider dumping January 26 as Australia Day

The Alphington Mill demolition from above

The land where paper was made for more than 80 years has made way for a $2 billion eco-development on the banks of the Yarra.

The parcel of riverside land was once completely owned by packaging company Amcor. It is now riddled with asbestos and other chemicals as a result of more than 80 years of paper manufacturing on the site.

Together with a joint venture partner, developer Glenvill is paying Amcor $120 million for the land on which it plans to build 2500 homes.

Clearing and demolition works are still pressing ahead on much of the 16.5 hectare site.

Such is the scale of development on the land that Glenvill is building a four-level sales display block that, on an ordinary site, would be its own standalone housing project.

While much contamination has been cleaned up, the worst pockets remain next to the Yarra River, where for decades chemicals seeped into the soil and water from paper and cardboard manufacturing.

Fairfax Media approached Amcor for comment on the dispute, and to ask what contamination it had left behind. A spokeswoman for the company said: "It is not appropriate for us to comment on matters subject to legal process."

Supreme Court Justice Kim Hargrave told all of the parties at last week's hearing that it would be good to avoid a protracted legal dispute over the site.